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ESG-driven ecopreneur selection in European financial institutions: entropy and TOPSIS analysis

Konstantina Ragazou (Department of Management Science and Technology, University of Western Macedonia, Florina, Greece) (Department of Economics and Business, Neapolis University, Paphos, Cyprus)
Christos Lemonakis (Management Science and Technology Department, Hellenic Mediterranean University, Heraklion, Greece)
Ioannis Passas (Department of Business Administration and Tourism, Hellenic Mediterranean University, Heraklion, Greece) (Department of Accounting and Finance, Neapolis University, Paphos, Cyprus)
Constantin Zopounidis (Department of Production Engineering and Management, Technical University of Crete, Chania, Greece) (Audencia Business School, Institute of Finance, Nantes, France)
Alexandros Garefalakis (Department of Business Administration and Tourism, Hellenic Mediterranean University, Heraklion, Greece) (Department of Economics and Business, Neapolis University, Paphos, Cyprus)

Management Decision

ISSN: 0025-1747

Article publication date: 14 May 2024

195

Abstract

Purpose

This is the application of the Entropy and TOPSIS model to assess the eco-efficiency of European financial institutions using environmental, social, and governance (ESG) strategies. The aim is to categorize financial institutions based on key factors such as environmental training and management and to examine the alignment between ideal ESG performance and eco-efficiency.

Design/methodology/approach

The study uses environmental, social, and governance (ESG) strategies to identify and categorize eco-entrepreneurs in European financial institutions. The study utilizes data to examine the structure between environmental training, effective management practices, and the green performance of financial institutions.

Findings

The study shows that European financial institutions exhibit varying degrees of eco-efficiency as assessed using the Entropy and TOPSIS model applied to ESG strategies. Surprisingly, the study found that institutions with a high ESG performance do not always match those with the highest eco-efficiency.

Research limitations/implications

They emphasize the need for financial institutions to align their operations with sustainable practices. This research provides insights to increase eco-efficiency and improve the ESG performance of financial institutions. It also informs policy and decision-making in these institutions in relation to environmental training and management practices, contributing to the wider dialogue on sustainable finance.

Originality/value

This indicates a discrepancy between ESG ratings and actual eco-efficiency, emphasizing the need to reassess the ESG framework. The study findings are crucial for aligning financial institutions with sustainable practices and improving the effectiveness of the ESG framework, especially for institutions at the lower end of the eco-efficiency spectrum.

Keywords

Citation

Ragazou, K., Lemonakis, C., Passas, I., Zopounidis, C. and Garefalakis, A. (2024), "ESG-driven ecopreneur selection in European financial institutions: entropy and TOPSIS analysis", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-12-2023-2425

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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